Stock Buy Call: SP chemical Ltd by DBS Vickers

DBS Vickers Securities said it has upgraded its rating on SP Chemicals Ltd to "buy" from a "hold" and increased its target price to 0.80 sgd from 0.59 per share given the stock's attractive valuations. "A higher utilization rate, energy cost savings from the Co-Gen plant and anticipated lower benzene costs derived from lower oil prices bode well for the group," DBS said in a client note. The brokerage has revised upwards its 2006 and 2007 net profit forecasts for the firm 23.7 pct and 38 pct to 233.7 mln yuan and 290.6 mln, respectively. "Valuations are attractive as the stock is only trading at 4.8 times and 3.9 times 2006 and 2007 forecast PE," it said. At 10.18 am, SP Chemicals was up 0.01 sgd or 1.61 pct at 0.63 with 532, 000 shares traded.